EarthLink to Acquire New Edge Networks
Earthlink has announced that it is acquiring New Edge Networks for approximately $144 million, consisting of 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities. New Edge Networks has recently announced a series of interconnection arrangements with major payment processors.
The acquisition of New Edge Networks will enable EarthLink to easily and quickly expand its business in the fast growing small and medium business market. The Vancouver, Wash.-based company will give EarthLink one of the largest data communications networks in the country and a customer base that is expected to generate approximately $120 million in revenues in 2005.Together, EarthLink and New Edge Networks will be able to package their voice, data, protection, and security tools to meet the rapidly growing demand for high-speed access and VPN services by both small office and home office (SOHO) users as well as small and medium enterprise (SME) customers.
"New Edge Networks is a tremendous growth platform for EarthLink to compete in the rapidly expanding SME networking market," said Bill Heys, president of EarthLink's value and small to medium enterprises business unit. "This acquisition builds upon our existing suite of award-winning services for small businesses and gives New Edge Networks the added resources to strengthen its market position."
"When we bring together EarthLink's financial resources and reputation for outstanding customer service with our national network and proven track record of performance, we will be uniquely positioned for serving our customers and tapping the growing market for business networks," said Dan Moffat, president and CEO of New Edge Networks. "We believe this transaction benefits customers, investors and employees of both companies."
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